UK Residential Property Prices Fall At Fastest Rate For Three Years

UK residential property prices have dropped at the fastest rate for three years and now UK economists are warning that the double-dip recession will push them down further.

Nationwide published figures last week showing the average value of a residential property has dropped by 2.6% since July 2011.

The news is the biggest annual fall in UK property prices since August 2009 and follows a drop in property values almost every month since December.

In July 2012 the average UK residential property lost 0.7% of its reported value.

The figures from Nationwide also reveal a slump in average property prices since the peak of the UK property market in October 2007 when average residential property values stood at £186,044 (GBP).

Today the average property value is worth £164,389 (GBP), a fall of £21,655 (GBP) which is almost the equivalent of an average UK annual wage.

Robert Gardner, chief economist at the Nationwide said “The drop is unsurprising given the disappointing performance of the wider economy”.

Official figures showed that last month the UK was still struggling with the longest economic downturn in history.

National residential property prices mirror the economic struggle in the UK with only the shortage of habitable residential properties available preventing larger price falls in many parts of the country.

Mortgage lending figures are still poor, and lenders’ reluctance to lend is being felt most keenly by first-time buyers and landlords who want to expand their property portfolios.

Nationwide refuses to predict if house prices will continue to fall, but economists have already made their own bleak forecasts, stating that UK house prices are likely to remain under pressure for the rest of the year.